Mortgage Closing Costs in DC, Maryland & Virginia: What You'll Pay and How to Reduce Them

Most first-time buyers budget carefully for the down payment — and then get surprised at the closing table. Closing costs in the DC metro area typically add another 2–5% of the loan amount on top of whatever you are putting down. On a $450,000 loan, that is $9,000 to $22,500 in fees, taxes, and prepaid expenses due at closing. The good news: some of these costs are negotiable, some can be covered by the seller, and some have exemptions specifically for first-time buyers in DC, Maryland, and Virginia. Here is the full breakdown.

What Are Closing Costs?

Closing costs are the fees and expenses you pay to finalize a home purchase — beyond the down payment itself. They cover everything from the lender's administrative work to government taxes on the property transfer to prepaid insurance and interest. They are paid on the day you close, either out of pocket, rolled into the loan (on some programs), or credited by the seller or lender.

Your lender is required to give you a Loan Estimate within three business days of receiving your application. The Loan Estimate itemizes all expected closing costs. Three business days before closing, you receive the Closing Disclosure — the final version. You have the right to review it carefully and ask questions about any item before you sign.

Two Types of Closing Costs: One-Time vs. Recurring

Not all closing costs are the same type of expense. There are two distinct categories:

• Non-recurring costs — paid once at closing and never again. Origination fees, appraisal, title insurance, transfer taxes, and attorney fees fall into this category.
• Recurring (prepaid) costs — ongoing expenses you prepay at closing to fund your escrow account. Homeowners insurance, property taxes, and prepaid interest are prepaid at closing but will continue as part of your monthly payment.

When comparing loan estimates from different lenders, look at total closing costs — both categories combined. A lender quoting low origination fees but high prepaids is not necessarily cheaper overall.

Closing Costs Breakdown: Every Line Item

Transfer Taxes: The Biggest Variable in DC, Maryland, and Virginia

The most significant source of variation in closing costs across the DMV is transfer and recordation taxes — government fees assessed when a property changes hands. These differ considerably by jurisdiction, and first-time buyers in each location may qualify for meaningful exemptions or reductions.

Washington, DC

DC charges both a transfer tax and a recordation tax, typically split between buyer and seller. For properties between $400,000 and $1,000,000, each tax is 1.1% of the purchase price. On a $600,000 purchase, the combined taxes equal $13,200 — split roughly $6,600 per side if negotiated that way. Properties over $1,000,000 are taxed at 1.45% per side.

Maryland

Maryland has both a state transfer tax (0.5% of purchase price, typically split evenly between buyer and seller) and a county transfer tax. County rates vary: Montgomery County charges 1%, Prince George's County charges 1.4%, and other counties charge between 0.5% and 1.5%. Maryland also assesses a state recordation tax plus a county recordation tax, the rates of which vary by county.

First-time buyers in Maryland receive a 50% credit on the state transfer tax and, in most counties, on the county transfer tax as well. On a $400,000 purchase in Prince George's County, a first-time buyer typically saves over $3,000 compared to a repeat buyer purchasing the same home.

Virginia

Virginia's recording fees are notably lower than DC and Maryland. State and local recordation taxes typically total 0.25–0.33% of the loan amount. Virginia does not charge a buyer transfer tax; instead, sellers pay a grantor's tax of $0.10 per $100 of the sales price. On a $500,000 purchase in Fairfax County, a buyer's recording and transfer-related closing costs typically run $1,200–$1,800 — making Virginia the most affordable of the three jurisdictions from a tax standpoint.

How Much Should You Budget by State?

• Virginia buyers: budget 2–3% of the purchase price for total closing costs
• Maryland buyers: budget 2.5–4% (higher due to county transfer taxes; first-time buyers at the lower end)
• DC buyers: budget 3–5% (highest due to combined transfer and recordation taxes; first-time buyers who qualify for the exemption may land closer to 2.5–3%)

Strategies to Reduce Your Closing Costs

Negotiate Seller Concessions

In a buyer's market — or when purchasing a home that has been on the market for a while — you can negotiate for the seller to cover some of your closing costs. These seller concessions do not come as a check; they are reflected in the purchase contract as a credit applied at closing. FHA loans allow up to 6% in seller concessions. Conventional loans allow 3–9% depending on your down payment. VA loans allow up to 4% in seller concessions plus all customary closing costs.

Use Lender Credits

Some programs allow lender credits — you accept a slightly higher interest rate in exchange for the lender covering a portion of your closing costs. This trades upfront cash savings for a higher monthly payment over the life of the loan. It makes the most sense for buyers who are cash-constrained at closing and do not plan to hold the loan for more than 5–7 years.

Shop Your Settlement Services

Unlike lender fees, you can shop for several third-party services listed on the Loan Estimate — title insurance, settlement agent, and attorney. Prices vary significantly between providers. Getting a second quote on title insurance and settlement fees alone can save $500–$1,000. Your Loan Estimate will indicate which services you can and cannot shop for.

Layer Down Payment Assistance on Top

Many down payment assistance programs in Maryland and Virginia also cover closing costs — not just the down payment. Programs like TRIO (minimum 620 score) and Chenoa (minimum 640 score), both layered on FHA loans, can be structured to dramatically reduce the cash you bring to closing. If you are a first-time buyer in the DMV, exploring DPA options before assuming you need to fund full closing costs out of pocket is worth the conversation.

A Note on No-Cost Brokers

Origination fees — what a lender charges to process your loan — can add 0.5–1% to your closing costs. As a no-cost broker, United Mortgage Plus charges no origination fees to borrowers. Our compensation comes entirely from the lender side, and because we work with over 100 lenders, we can still shop for competitive rates. Eliminating the origination fee removes one of the more significant line items from a standard Loan Estimate.

Bottom Line

Closing costs are unavoidable, but they are not fixed. Understanding which costs are negotiable, which exemptions you qualify for as a first-time buyer, and how seller concessions and lender credits work gives you real leverage at the closing table. If you want a personalized closing cost estimate before you make an offer — so there are no surprises on closing day — reach out and we will run the numbers for you at no cost.